BIS SPEECHESTiff Macklemcentral bank
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FX BANK FORECAST · COVERAGE
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Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 35 institutional desks. No promotion.
FX BANK FORECAST · COVERAGE
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 35 institutional desks. No promotion.
The desk anticipates a cautious approach from the Bank of Canada following Tiff Macklem's recent remarks, suggesting that while inflation remains a concern, the central bank is unlikely to make aggressive rate hikes in the near term. Per the full note source, Macklem emphasized the importance of data-driven decisions, particularly in light of upcoming economic indicators. With inflation data due on May 19 and GDP growth figures on May 29, these releases will be critical in shaping the Bank's future policy stance. Our analysis suggests that the CAD may face headwinds if the data falls short of expectations, reinforcing the cautious tone from the BoC.
Macklem's opening statement emphasizes data-dependence amid global uncertainties, suggesting the BoC will hold rates steady but maintain a hawkish bias. We see CAD upside risk if inflation persists.
Our consensus is for the BoC to keep rates on hold at 4.50% through Q3, with a narrow spread reflecting mixed domestic data. Client flows show CAD shorts trimming.
How firms align with this view
Key takeaways
Market implications
Short-term CAD may strengthen on hawkish hold; if data weakens, BoC could pivot dovish, pressuring CAD. Rates market repricing likely modest.
Risks to this view
Upside inflation shock forces BoC to hike, boosting CAD. Conversely, growth slowdown accelerates cuts, weakening CAD.
How we cover this story
See how the Bank of Canada outlook moves the CAD bank consensus across 35 desks
View Bank of Canada outlook